英语论文网

l is traded for cash and the delivery is done immediately in the spot market. The future price represents the market’s collective point of view, at a specific time, of where prices may be headed, which is why the price for oil manipulated by the futures market price.

The price of the futures market in the next month is often quoted by the media as a representative of the current price of oil.

Present status and challenges of oil pricing in Asia

Oil pricing in Asia

Amidst the deregulation globalization trend in the oil sectors, the pricing mechanisms of Asia key nations have been formulated. Prices are determined according to the market mechanism without any intervention from the government in Japan, South Korea and Singapore and are directly and indirectly affected by the Singapore Market (MOPS).

However, the government owned oil companies take control over the oil supply system in china, Taiwan and India. Regulation of the prices is done by subsidizing specific companies.

A close watch should be kept on the countries with regulated pricing mechanisms as steps for price deregulation will be taken by in the future by these countries as shown by recent trends (Maekawa,2010; Kawamura,2010)

Oil-Pricing mechanism under Government-controlled price

China

The two oil producers/suppliers, China National Petroleum Corporation (CNPC) and China Petroleum and Chemical Corporation (SINOPEC) were implemented in a program to consolidate and realign them by Chinese government in February 1998.

The objectives of the program were as follows:

Inducing competition among multiple oil sectors by a solid framework and to adopt market mechanisms and principles, to activate the oil sector.

Promoting streamlined business operation of state oil companies to ensure profitability and growth of the oil sector which is a key industry of china.

Enhancing the international competitiveness of china by creating a multi segment oil company capable of competing with international oil majors.

However, as the government has the sole discretion to make adjustment to the price (amount and timing), the mechanism still bears the nature of government controls. Depending on the level of crude oil price, the refining margin fluctuates according to 3 stages under this mechanism. For example, when the crude oil price falls below $80 per barrel, oil refining sectors would enjoy the refining margin but when price exceeds $80 per barrel, there will be a narrower margin.

The price was changed 8 times in 2009 with no change in November 2009 to April 2010, inspite of crude oil price fluctuation. A request has been reportedly submitted to the government to amend the basic formula for price adjustment by state-owned oil companies.

CNOOC has taken steady actions to expand its business domain from its downstream business segment to refining business and further to wholesale and retail services, with the upward trend in turnover of upstream business segments.

The three major stages petroleum groups are shown below. These groups carry out their business in each other’s domains.

An oil pricing mechanism that adjusts prices when the moving average of a basket of international crude (Cinta, Dubai &